1. NUM WESTERN CAPE SUBMISSION ON IRP 2018
2018/10/17

2. CONTENT Introduction and background Aims and objectives of IRP
Security of supply
Minimize cost of electricity
Minimize environmental impact
Minimize water usage
IRP2018 Proposed energy mix
NUM submission

3. Introduction and background
The NUM notes the release of the draft IRP 2018 draft. The NUM observed that the draft new IRP 2018 has changed the country’s proposed energy mix drastically. We have noted the reduction of the future coal usage. We have also noted the elimination of the nuclear build completely from the draft. We also observed that the introduction of the Renewable Energy Independent Power Producers (REIPPs) is intensified.
The plan aims to ensure security of supply, to minimize cost of electricity, to minimize environmental impact and to minimize water usage. We will concentrate on these four primary aims while critiquing and making progressive proposals to the draft plan.

4. Aims and objectives of IRP
The aims and objectives of the IRP 2018 as reflected on the draft are as follows:
To ensure the security of supply
To minimize cost of electricity
To minimize environmental impact
To minimize water usage

5. SECURITY OF SUPPLY
The only way to achieve the security of supply as a country is to have reliable base load electricity. The proposed energy mix by the draft IRP 2018 does not in any way provide a reliable and stable base load. Base load is defined as the energy plants or power stations that are able to produce energy at a constant or near constant rate. The proposed mix of only 46% coal and 2.5 nuclear is not going to assist in achieving the security of supply. IRP 2018 Draft. The present draft IRP rely more on wind and solar energy. It proposes gas to compensate for when there is no wind and sun. South Africa does not have gas at present.

6. Minimize the cost of electricity
The proposed plan will fail to minimize the cost of electricity. This is due to the proposed structure of the IPPs having to sell electricity to Eskom based on the signed Power Purchase Agreements (PPAs). The present agreements compel Eskom to buy electricity from the IPPs at R2.14 and sell it at R0.90. This arrangement will force Eskom to increase the price of Electricity so that it can be able to cover the shortfall.
At the end the consumers will have to pay more for the electricity. This will defeat the first aim of the IRP Most sources of energy are expensive to construct but very cheap during operation, therefore when the cost analysis is conducted it must take that into account. In South Africa today Koeberg Nuclear Power Station produces the cheapest electricity
Eskom Financial statement

7. Minimize water usage
Research has shown that water usage for the generation of electricity can be reduced by the new coal and nuclear technology. Medupi and Kusile will use less water that Grootvei and Komati.
In South Africa agriculture alone uses 63% of water, domestic usage amounts to 31% and industries including electricity generation uses only 6%. It is just irrational that we focus on power generation when we talk to reduction of water usage. Reducing of water usage cannot be the reason why we cannot use coal and nuclear. It only used to justify the case for solar and wind.

8. Minimize water usage
20 years focus of water usage in electricity generation in South Africa amidst water scarce conditions

9. IRP2018 Proposed energy mix
IRP-Update-2018-Draft-for-Comments

10. NUM SUBMISSION
We as submit as the NUM that the reduction of coal in the mix be reversed. South Africa is one of the countries which still have huge coal reserves. We can’t just stop using this strategic resource. What we suggest is that we venture into clean coal technology. South Africa is exporting 92% of coal used in Africa. Eskom states on its website that South Africa has more than 200 years’ worth of coal left. According to the department of mineral resources South Africa have more than 67 tons of coal reserves.
The reduction of coal usage in the proposed mix means that we will use less coal in South Africa to produce electricity. What worries us is that the mining of coal is not going to stop. Coal will be mined and exported to other countries like China who are going to burn the coal to the very atmosphere we are trying to save.

11. NUM SUBMISSION
The 15% portion of gas in the energy mix be reduced to 5% until such time we are guaranteed as a country that gas is available to run the Open Cycle Gas Turbines (OCGT). The use of diesel to run the OCTG is unsustainable and must be condemned. We have noted that gas will be used to back up the solar and wind during the night and when the wind is not blowing. We are requesting a proper and stable base load.
South Africa needs to grow the economy in order to address challenges of unemployment and reduce levels of poverty. The envisaged drop in electricity demand is not ambitious. It doesn’t talk to the problems of the country. It assumes the worst is going to continue. The danger with the assumptions proposed is that if the economy can recover the country will be plunged into load shedding. We therefore propose that coal remains at 40 000 MW as it is today.

12. NUM SUBMISSIN
The NUM is not in support of the concept of pass through. We believe this method will bankrupt Eskom and render it insolvent if it continues. The government and the IPPs must find other ways of collecting revenue than using Eskom. It cannot be correct and be allowed to continue that Eskom will buy
electricity at R2.14 and sell it at R0.98. This arrangement is not sustainable, it will bankrupt Eskom. We suggest that let the big minds in the electricity space come together to find another way which is not going to destroy Eskom.

13. THANK YOU
K BALOYI